World: Analysis From Washington -- Toward Welfare Pluralism

Washington, 6 June 2001 (RFE/RL) -- A United Nations group has concluded that neither the state nor the market can be relied on to solve social welfare tasks in most countries and that the institutions of civil society -- communal, religious, and nongovernmental organizations -- must play a larger role.

Writing in the current issue of the publication of the United Nation's World Institute for Development Economics Research, Germano Mwabu, Cecelia Ugaz, and Gordon White suggest that both the state and the market have serious limitations as delivery vehicles for social welfare services.

Countries that have relied on the state to provide such services, the authors suggest, have often discovered that bureaucrats do not use resources rationally because they set prices for such services at levels that encourage overuse and ultimately undermine the ability of the society to support its poorest members.

But countries that have turned to the market, these authors argue, have discovered that the market too has "serious problems" as a delivery mechanism for social services. Many social services -- such as immunizations -- benefit society as a whole more than any particular individuals, and thus societies who rely on the market alone tend to underspend on such programs.

Moreover, these UN specialists argue, recent research shows that many low-income countries which turn from government-provided to market-provided services not only underspend but create conditions which lead to the under-utilization of the services that do exist. And that in turn has increased rather than decreased the divide between the wealthiest and the poorest members of society.

Because of these limitations in these two approaches, many countries are seeking to find a new middle way to address the provision of social services, a way that the authors describe as welfare pluralism. They suggest that the government should remain responsible for those things that benefit the society as a whole more than particular individuals

And the UN experts argue that the market should be the primary delivery mechanism for other services from which individuals gain the most -- with the qualification that the state should always be ready to help those with too little money to take advantage of these services.

But even societies that use both government and market-provided welfare are discovering that there is a range of services that neither the state nor the marketplace seems capable of resolving. And the UN experts suggest that this gap should be filled by the institutions of civil society, which will be in a position "to avoid the familiar inefficiencies of state supply and the social exclusion sometimes associated with market provision."

There are many reasons to turn in this direction, the UN specialists say. Civil society institutions "can be a low-cost provider, can respond directly to community needs, and seem to be in a better position to reach the poor." But because few government officials or market managers have viewed these institutions in this way, several things will have to happen to allow them to play this role.

First, the UN experts say, "governments must reduce impediments such as overzealous regulations that constrain the formation and operation of civil society organizations."

Second, civil society institutions need a great deal of outside support in building up their management capacity.

And third, these institutions to be most useful to society must develop feedback and evaluation loops to allow them to respond quickly to social problems.

On the one hand, the United Nations specialists are saying nothing more than many countries are already doing. In the United States, for example, the government is discussing involving faith-based institutions to help cope with a wide variety of social ills.

But on the other hand, the UN recommendations are more far-reaching. They point to a vision of society in which government bureaucracies, market entities, and private institutions become partners in societal management, an arrangement far in advance of most social theory today.

And consequently, the UN experts' call for welfare pluralism is in fact an appeal for a reconsideration of the nature of the relationship among state, economy, and society that is at least as profound as the shift from the state-centered visions of the past to the market arrangements of today.